ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Amit Spinning

Torrent Cables TORRENT CABLES (formerly Mahen- dra Electricals), incorporated in I960, was taken over in July 1989 by the Torrent group which is a multiproduct, diversified industrial group with a sales turnover of Rs 294 crore. Since purchasing the continuous catenary vulcanising (CCV) line in September 1991, the company has established itself as a reputed XLPE cable manufacturer in the country. XLPE cables are specialised usage cables which are used extensively for distribution of power from generating stations as also in mining, railways, ships, elevators, etc The company now proposes to install balancing machinery, and modernise the existing machinery to increase the XLPE cables manufacturing capacity from 350 kilometres to about 600 kilometres per annum. It also plans to add a new product, Elastomeric cables, to its product range. To part finance the expansion and modernisation the company is entering the capital market with a public issue of 7,48,038 14 per cent secured redeemable partly convertible debentures of Rs 150 each aggregating Rs 11.2 crore. The issue, which will be lead-managed by Bank of Baroda and Gujarat Lease Financing, is scheduled to open for public subscription on October 11, 1993. Out of the face value of Rs 150T part A of Rs 35 will be converted into one equity share of Rs 10 at a premium of Rs 25 on January I, 1994 while part B of Rs 55 will be converted into one equity share of Rs 10 at a premium of Rs 45 on January 1, 1995. ftart C, which will be the non-convertible portion, will be redeemed at par in three equal annual instalments at the end of the 6th, 7th and 8 th years from the date of allotment. The company also has a buy- back arrangement with ANZ Grindlays Bank for investors not opting to retain the non-convertible portion. The major elements of the Rs 33.3 crore project arc Rs 17.3 crore (52 per cent of project cost) for working capital margin and Rs 6.6 crore (19.8 per cent) for plant and machinery. Apart from the public issue the project is also to be financed through a rights issue of equity and partly convertible debentures aggregating Rs 15.8 crore to the existing shareholders and a Joan of Rs 6.3 crore under equipment finance scheme loan from IDBI. On the basis of an appraisal made by Bank of Baroda the company is expected to earn a total income of Rs 70 crore for 1994-95 resulting in a net profit of Rs 4 crore. The earnings per share on an equity of Rs 7.5 crore works out to Rs 6.15 resulting in a price- to-earnings ratio of Rs 5.62 while the industry's composite price-to-earnings ratio works out to Rs 19.50.

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